General Motors says it has tentatively agreed to sell its Hummer brand
General Motors has agreed to sell the Hummer brand to China's Sichuan Tengzhong Heavy Industrial Machinery.
Tengzhong, formed in 2005 through several mergers, makes special-use vehicles such as dump trucks and fuel tankers, as well as construction machinery, energy equipment, and structural components for highways and bridges.
Tengzhong would assume Hummer's dealer agreements and a senior management team, the companies said. GM and Tengzhong also plan to form a long-term contract assembly and supply agreement.
Hummer is worth US$500 million, according to bankruptcy court documents filed by GM.
The deal may also help Tengzhong grow in China's SUV market, which surged 25 per cent last year on rising affluence.
"There are a lot of new rich in China who like niche brands, such as Hummer," said Ricon Xia, a Daiwa Institute of Research analyst in Shanghai. "A lot of private companies like Tengzhong have emerged because of the economic boom and they will strike more surprising deals like this one."
The sale will likely save more than 3000 jobs in the US.
Many saw the gas-guzzling Hummer as a symbol of excess, leading to GM's downfall.
A sale of the Hummer brand had been expected. Chief Executive Fritz Henderson said in April that the automaker was expecting final bids from three potential buyers.
"I'm confident that Hummer will thrive globally under its new ownership. And for GM, this sale continues to accelerate the reinvention of GM into a leaner, more focused and more cost-competitive automaker," Troy Clarke, president of GM North America, said in a statement.
GM is also trying to sell its Saab and Saturn brands and will phase out its Pontiac brand as it concentrates on its Chevrolet, Cadillac, Buick and GMC nameplates.